Google Faces Potential $5 Billion Fine From Competition Commission of India For Violation Of Local Norms

The Google logo is spelled out in heliostats (mirrors that track the sun and reflect the sunlight onto a central receiving point) during a tour of the Ivanpah Solar Electric Generating System in the Mojave Desert near the California-Nevada border on Feb.13, 2014.
Reuters/Steve Marcus

Google (NASDAQ:GOOG) stands to face a penalty of up to $5 billion from the Competition Commission of India, or CCI, which is investigating the world's largest search engine company for violating competition norms in the country, according to news reports.

The case has been with the CCI for more than two years during which time the fair-trade watchdog has investigated claims from other Internet companies that Google is abusing its position in India. According to regulations, if the company is found guilty of violating local norms, it could be charged a fine worth nearly 10 percent of its annual turnover for three years.

"We are extending full co-operation to the Competition Commission of India in their investigation," a Google spokesperson said, according to Press Trust of India, or PTI.

The Federal Trade Commission had also reviewed the company in 2013 and found its practices in the U.S. to be “good for users and good for competition.” Google has settled anti-trust cases in the U.S. and the European Union, or EU, but, in India, there is no provision for a settlement process and complaints cannot be withdrawn from the CCI, PTI reported. The European Commission’s Directorate General had opened the investigation in 2010.

"We're pleased that the conclusion of the Federal Trade Commission's two year review was that Google's services are good for users and good for competition," a Google spokesperson said, according to PTI.

The complaint against the Internet giant in India was first filed by Consumer Unity and Trust Society, an advocacy group, and later by Matrimony.com, a match-making portal.

"Google's unfair use of trademarks as well as its retaliatory conduct are not specifically addressed in the European settlement and are distinct theories of harm being pursued by the CCI. Therefore, this settlement is unlikely to address CCI's concerns in our case," Ferida Satarawala, the legal counsel for Matrimony.com said, referring to Google's settlement with the EU, according to PTI.

CCI Chairman Ashok Chawla had alleged last year that Google’s search engine, while returning search results, favors websites that the company wants to support.

"That is when you click on Google under a certain category, you will get the platforms where there is a tendency to put them in a certain order which may not be the fair and non-discriminatory manner. So, what is the software and what is the algorithmic search, (that is) what the investigation team is looking at," Chawla reportedly said last year, according to PTI.